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Are Investors Undervaluing APA (APA) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

APA (APA - Free Report) is a stock many investors are watching right now. APA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.85, while its industry has an average P/E of 8.03. Over the past year, APA's Forward P/E has been as high as 9.67 and as low as 4.75, with a median of 6.16.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. APA has a P/S ratio of 1.33. This compares to its industry's average P/S of 1.86.

Finally, investors will want to recognize that APA has a P/CF ratio of 3.77. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. APA's current P/CF looks attractive when compared to its industry's average P/CF of 5.04. Within the past 12 months, APA's P/CF has been as high as 4.91 and as low as 2.05, with a median of 3.21.

Murphy Oil (MUR - Free Report) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. MUR is a # 2 (Buy) stock with a Value grade of A.

Murphy Oil sports a P/B ratio of 1.22 as well; this compares to its industry's price-to-book ratio of 2.35. In the past 52 weeks, MUR's P/B has been as high as 1.62, as low as 0.98, with a median of 1.25.

These are only a few of the key metrics included in APA and Murphy Oil strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, APA and MUR look like an impressive value stock at the moment.

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